Personal Bankruptcy Advice

Discussion in 'Legal' started by engcc, Jul 31, 2012.

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  1. engcc

    engcc UKBF Contributor Free Member

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    Could anyone tell me if I could keep a credit card already in my name if i am made personally bankrupt if I keep up the repayments as normal, i've never missed a payment on the card and can afford to keep it as the balance is low ?
     
    Posted: Jul 31, 2012 By: engcc Member since: Mar 9, 2012
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  2. arcon5

    arcon5 UKBF Ace Free Member

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    Unlikely. Excluding debts from your bankruptcy petition would be seen as offering preferential treatment and is not allowed. Plus, the CC company may decide to close the account if they find out you are BR.
     
    Posted: Jul 31, 2012 By: arcon5 Member since: Sep 6, 2006
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  3. Alan R Price

    Alan R Price UKBF Newcomer Free Member

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    I am an insolvency practitioner.

    The credit card will be cancelled as soon as you are made bankrupt, no matter what your record is like - it's a matter of procedure for all the CC companies.

    You might qualify for a cash card with your bank or a card where you build up a credit balance so you can use it for online purchases and so on.
     
    Posted: Aug 1, 2012 By: Alan R Price Member since: Jul 5, 2010
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  4. engcc

    engcc UKBF Contributor Free Member

    33 1

    What about a car on finance ? does this have to go back to the finance company ? Even though I require this for work and can easily afford the repayments ?
     
    Posted: Aug 1, 2012 By: engcc Member since: Mar 9, 2012
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  5. Lease4Less

    Lease4Less UKBF Enthusiast Free Member

    522 128
    Not if you are looking for a good deal.

    If you are declared bankrupt you are basically saying I cannot easily afford the repayments.

    There are some sub-prime companies that may look at it but you will need a high deposit and will pay a high premium.
     
    Posted: Aug 1, 2012 By: Lease4Less Member since: Jul 13, 2010
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  6. ITsoldUK

    ITsoldUK UKBF Newcomer Full Member

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    Bit of a contradiction I am afraid and the OR will be very interested to know why you have given preferential treatment to one debtor over another.

    Car would go, cards would go, bank debit/credit would most probable go (depends on your banks policy) and you would be required to start again.

    If you 'hide' any info you will face a longer discharge than 12 months dude so best to come clean, make a clean break and start again...
     
    Last edited: Aug 1, 2012
    Posted: Aug 1, 2012 By: ITsoldUK Member since: Sep 15, 2011
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  7. OldWelshGuy

    OldWelshGuy UKBF Legend Staff Member

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    if you can afford this, then why not look at an IVA?
     
    Posted: Aug 1, 2012 By: OldWelshGuy Member since: Jun 12, 2008
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  8. Spongebob

    Spongebob UKBF Ace Free Member

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    If the car is on HP then legally it belongs to the finance company until the final payment is made. Therefore the car cannot be considered an asset by the Official Receiver. Under an HP agreement the finance company effectively rents the car to the client until the final payment, whereupon ownership of the car transfers to the client.

    So long as payments are up to date the client never actually owes the finance company anything, and the finance company is not a creditor of the client.

    The Official Receiver therefore, has little or no interest in the matter. If the OP needs the car for work it is highly probable that the the monthly HP payments will be classed as an allowable expense in the bankruptcy; and so he will get to keep the car.
     
    Posted: Aug 1, 2012 By: Spongebob Member since: Dec 9, 2008
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  9. OldWelshGuy

    OldWelshGuy UKBF Legend Staff Member

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    Great advice as ever Spongebob
     
    Posted: Aug 1, 2012 By: OldWelshGuy Member since: Jun 12, 2008
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  10. Alan R Price

    Alan R Price UKBF Newcomer Free Member

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    If there is equity in the HP agreement the OR might look to realise it however a bankrupt is entitled to keep a modest vehicle for work or in his business. The OR's definition of modest is that it is worth less than £2,000. If the car is worth more than that the OR will sell it and allow the bankrupt £1,000 from the proceeds to buy himself another one. This might be different if the vehicle was part of the business, for example if the bankrupt was a courier or a haulier and was able to make income payments for the benefit of the creditors (but one would wonder if an IVA might be more appropriate, as OWG says. A bankrupt can do an IVA and get the bankruptcy annulled).

    If there is no equity and the monthly payments are not excessive, the bankrupt will usually be allowed to keep the vehicle and make the finance payments. In practice although the finance company will have the right to forfeit the agreement on bankruptcy, normally, as long as the payments are made, this will not happen. Sometimes the finance company will insist the agreement is transferred to a creditworthy third party.

    ITsoldUK - the preference point is a bit of a red herring, I'm afraid. A preference is a payment made to a creditor with the overriding intention of putting that creditor in a better position. Payments under a mortgage, HP or similar agreement, which could involve property being repossessed if they are not made, are not generally considered to be preferences.
     
    Posted: Aug 2, 2012 By: Alan R Price Member since: Jul 5, 2010
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  11. ITsoldUK

    ITsoldUK UKBF Newcomer Full Member

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    Thanks Alan, I am not a trained Insolvency guys was just imparting info gleamed from various sources.

    Cheers for the clarification and the information is gratefully received.
     
    Posted: Aug 2, 2012 By: ITsoldUK Member since: Sep 15, 2011
    #11
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